By Ranamita Chakraborty
The insurance industry faces significant implications as COVID-19 lockdowns and an increase in working from home worldwide has limited the need to own private vehicles which will cause more consumers to consider new models of vehicle ownership
The number of private motor insurance policies in force is therefore projected to reduce as more people turn to car-sharing schemes for their transportation needs during the COVID-19 pandemic according to GlobalData.
The analytics firm suggests that insurers need to provide short-term policies for drivers using these services.
Insurers that can partner with car-sharing companies to offer insurance at the time of booking are expected to be much better placed to capitalise on the shift in consumer behaviour.
According to GlobalData insurance analyst Yasha Kuruvilla, such partnerships create more opportunities for InsurTechs – major players in the usage-based insurance space.
“This change in behaviour will be concentrated in cities, where individuals are able to conduct their daily business without the use of a car and will only need one occasionally. However, car-sharing schemes will have hurdles to overcome.
“Customers must be confident that the cars are properly cleaned and sanitised after each use. And with the global community now more aware of health risks, vehicle owners may face increased premiums as insurers look to protect themselves from liability claims should someone contract an illness while using the service,” he said.
Asia Insurance Review